UK house prices still showing growth despite rising at the slowest rate in four years
8th August 2017
Although the average UK house price rose to £219,000 in the three months to July, price growth is at its slowest rate in more than four years, according to new figures.The 2.1 per cent (+£4,651) rise is the lowest annual rate of increase since April 2013, despite the strongest employment levels seen in the UK since 1975, according to the latest house price index from Halifax. High levels of employment are usually an indicator of increased spending power, ability to get a mortgage and confidence among home buyers, but the report found that the volume of mortgage approvals for house purchases fell by 0.7 per cent between May and June this year.“The rise in the employment level by 175,000 in the three months to May helped push the unemployment rate down to 4.5 per cent, the lowest since June 1975,” said Russell Galley, managing director of Halifax Community Bank.
The London boroughs where house prices have soared by 500% in 20 years“However, this improvement in the jobs market has not, as yet, boosted wage growth, resulting in earnings rising at a slower rate than consumer prices.“This squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand.”The figures suggest the squeeze on buyer affordability is ongoing following years of rapid price increases as well as a lack of homes available for sale.
Nonetheless, UK house prices are still 42 per cent higher (£64,603) than the low of £155,000 recorded in April 2009.“A continued low mortgage rate environment, combined with an ongoing shortage of properties for sale, should help continue to support house prices over the coming months.” The best UK cities for first-time buyers to get on the ladderMapped: the most expensive and the cheapest cities to rent in the UKHouse prices in most popular UK cities stronger than expected in 2017London house prices remained the highest in the country despite the sluggish market, with long term prices rises in the capital almost double those seen in the rest of the country. The average price per square metre for a home in Britain increased by 236 per cent in 20 years. In Greater London the average price increase was 402 per cent. The north east London borough of Hackney saw the greatest 20-year price growth in the country with the cost of the average house in the borough rising 753 per cent since 1997, pushing the average cost of a home to £527,000.To compare price by square metre, house price growth is calculated by dividing the average property price in an area by the average square metre measurement of every home in the same area, excluding outside space.